Changes In The CSLB Laws And Regulations: What You Need To Know

Every year the California Contractors State License Board (CSLB) makes new changes to its laws and regulations, which may cover construction bonds or the ability for a contractor to obtain a contractor's license bond. Here are the changes in laws and regulations the California CSLB made for 2012:

CSLB Licensing and Board Operations

The CSLB must now be notified within 90 days of a Responsible Managing Officer's (RMO) or Employee's (RME) disassociation from the license. The bill also enables a 90-day extension in limited circumstances to replace the qualifier for the license.

Employment and Payroll

The CSLB has increased the fines for contractors who fail to pay established wages on public works projects and for failure to provide certified payroll records in a timely fashion. They now also require the Labor Commissioner to notify the CSLB when it updates its lists for these violations, and to notify awarding bodies of the availability of debarred contractors on an annual basis. Additionally, certified copies of a contractor's payroll records must be made available to members of the Joint Enforcement Strike Force on the Underground Economy or other law enforcement on request. If requested, these records would not include information on the employees.

Energy Efficiency

The CSLB has authorized the California Energy Commission to assess administrative or civil penalties to contractors for violating energy efficiency standards. Public utility rebates or incentives are also prohibited unless the recipient certifies that the installation or improvement was completed by a licensed contractor and that the required inspections and permits were obtained.

Indemnification Clauses

Beginning in 2013, contractors are restricted from using indemnification clauses to pass through to subcontractors the liability for certain legal damages. Subcontractors would not have to pay for either accidental or deliberate harm caused by contractors, other subcontractors, or other parties. This law does not apply to certain contracts such as those governing public buildings, residential homes, workers' compensation agreements, and some insurance agreements.

State Taxes

In addition to the current disciplinary laws coordinated between the CSLB and the Franchise Tax Board, Department of Industrial Relations, and the Employment Development Department, the CSLB may discipline a license for failing to resolve outstanding final liabilities assessed by the Board of Equalization,

Small Claims

Small claims court jurisdiction has been raised from $7,500 to $10,000.

Other Changes

Contractors who certify that they have no employees and are exempt from carrying a workers' compensation policy are required to submit a new certification each time the license is up for renewal. C-39 roofing contractors must still purchase workers' compensation insurance coverage even if they certify they have no employees.

Workers' compensation insurers are also now required to report to the CSLB if a licensee's policy is cancelled as the result of a premium investigation or audit, or a misrepresentation that results in harm to the insurer without reimbursement being made.